Foreign Investors Have Withdrawn More Than $20 Billion From Indian Equities In 2026

The amount of money withdrawn by FPIs from the Indian stock market within the first four months of 2026 has crossed the record amount withdrawn annually in 2025, which was $18.9 billion. The data showed nearly $19 billion of the outflows came after the Iran conflict escalated, triggering a sharp rise in global crude oil prices and increasing concerns over India’s import bill and inflation outlook.

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India imports nearly 90% of its crude oil requirements, making the economy vulnerable to volatility in energy prices.

Benchmark Indices Under Pressure

The Indian equity market indices remain under pressure as there continues to be foreign outflow in the Indian market. As of now, the Nifty 50 Index is lower by 8.2%, while the Sensex is lower by 9.8%. Additionally, the Indian rupee has reached record low levels against the U.S. dollar.

The selling pressure has been concentrated in financial and information technology stocks. According to NSDL data, financial stocks witnessed outflows of ₹79,981 crore, while information technology stocks recorded withdrawals of around ₹22,000 crore.

Market sentiment toward IT companies has also weakened amid concerns around artificial intelligence-led disruption in the global technology sector.

Domestic Institutions Offset Part Of The Selling

Domestic institutional investors have partly cushioned the impact of foreign outflows through strong buying in local equities. Data showed domestic institutions purchased equities worth $15.4 billion in March, offsetting record monthly foreign outflows of $12.7 billion during the same period.

The sustained domestic inflows have helped limit sharper declines in benchmark indices despite heavy foreign selling pressure.

Oil Prices And Global Risks Weigh On Sentiment

Rising crude oil prices linked to the Middle East conflict have emerged as a major concern for Indian markets. Higher oil prices increase India’s import costs and can affect inflation, fiscal balances, and the current account deficit.

Analysts said global investors remain cautious toward markets that are heavily dependent on imported energy and sensitive to commodity price fluctuations.

At the same time, uncertainty around geopolitical tensions and currency movements has added pressure on emerging market assets, including Indian equities. Despite continued foreign outflows, domestic liquidity support has helped stabilise broader market sentiment in recent months.